House OKs 100% foreign ownership in power, transport and communications
HB 78 was passed on third and final reading on Tuesday to the tune of 136 votes for and 43 votes against the measure. Only one House member opted to abstain. 
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House OKs 100% foreign ownership in power, transport and communications
(Philstar.com) - March 10, 2020 - 5:51pm

MANILA, Philippines — The House of Representatives on Tuesday afternoon approved a bill allowing for 100 percent foreign ownership in power, transport and communications sectors.

This was confirmed by Rep. Sarah Elago (Kabataan Party-list) in a tweet that same day. 

House Bill 78 seeks to amend the Public Service Act and delineates between the terms public service and public utility, which the 1987 Constitution prohibits foreign ownership of.

The nation's charter sets a limit of 40 percent foreign ownership on similar services and utilities. 

HB 78 was passed on third and final reading on Tuesday to the tune of 136 votes for and 43 votes against the measure.

Only one House member opted to abstain.  

Elago for her part took issue with the laxness of nationality restrictions, which she said would lead to "excessive foreign control over critical telecommunications, power and transport utilities." 

"Foreign control over important, critical services must be limited as required by the Constitution," she said. 

Article XII, Section 11 of the 1987 Constitution reads:

No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by such citizens; [...] The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines.

Lawmakers behind the measure argued that the bill would usher in more foreign investors and would boost competition.

This would eventually benefit consumers in the long run, they said. 

Rep. Rufus Rodriguez (Cagayan de Oro), who chairs the House committee on constitutional amendments, said, "It aims to lift the limitations on foreign investments in public utilities and the development in natural resources in order to have more employment for Filipinos. The Philippines is lagging behind its ASEAN neighbors in the amount of foreign direct investments."

However, House Bill No. 78 defines public service to cover:

“common carrier, railroad, street railway, subway motor vehicle, ice refrigeration plant, irrigation system, marine railways, wire or wireless communications systems; wire or wireless broadcasting stations; freight or carrier services, steam boats ferries and war craft engaged in the transportation of passengers or freight, gas, electric light, heat and power water supply and power, petroleum and sewerage system, among others.”

After the lower chamber's initial approval of the measure, labor group Defend Jobs Philippines said it foresees that allowing foreign ownership would lead to the following:

  • Cheaper wages
  • Docile labor and slashed benefits in favor or profits 
  • More difficult set-up for workers in terms of the level of bargaining
  • Labor flexibilization schemes
  • Job security issues, among many other concerns

"As it is, privatized utilities have already resulted in expensive water and power that is burdensome especially for millions of low-income consumers. Pinasa pa ito sa gitna ng public health emergency at matapos ang sunod-sunod na mga sakuna," Elago said. 

"Huwag po ninyong isugal ang aming kinabukasan. Serbisyo sa tao, huwag gawing negosyo. [The] Philippines is not for sale!"

Along with fear of labor violations came concerns on possible violations on national sovereignty that foreign control would bring, as well as the very constitutionality of the measure. 

"This narrow definition of public utilities seeks to bypass the current Constitutional limits on foreign ownership of public utilities and open up significant parts of the economy to foreign investors," Elago also said in a statement. — Franco Luna 

FOREIGN OWNERSHIP HOUSE BILL 78 HOUSE OF REPRESENTATIVES PUBLIC SERVICE ACT
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